Republic of the Philippines

BATANGAS STATE UNIVERSITY

Pablo Borbon Main II, Alangilan Batangas City
College of Engineering, Architecture & Fine Arts
www.batstate-u.edu.ph Tel. No. (043) 425-0139 loc. 118

Chemical and Food Engineering Department

IE – 531

Quantitative Methods in Management

Networking Methods, PERT and CPM

Martirez, Andrade M.
Sarmiento, Rolando III G.

ChE- 5201

Dr. Eufronia M. Magundayao

Instructor, ChE-530

February 27, 2018

Project Management

• Managers have been planning, scheduling, monitoring, and controlling large scale projects
for hundred years, but it has only been in the last 50 years that management science
techniques have been applied to major projects.

• In 1957, the Critical Path Method (CPM) was developed by Kelly and Walker to assist in
building and maintenance of chemical plants.
• In 1958, the special projects office of the US navy developed the Program Evaluation and
Review Technique (PERT) to plan and control the Polaris missile program.
• In the recent time, PERT and CPM are two popular management science techniques that
help mangers plan, schedule, monitor, and control large scale and complex projects

PERT/CPM

• PERT stands for Program Evaluation and Review Technique.

• CPM stands for Critical Path Method.
• PERT/CPM is used to plan the scheduling of individual activities that make up a project.
• PERT/CPM can be used to determine the earliest/latest start and finish times for each
activity, the entire project completion time and the slack time for each activity.
• PERT and CPM are similar in their basic approach, they do differ in the way activity times are
estimated.
• For each PERT activity three times (optimistic, pessimistic and most likely times) are
combined to determine the expected activity completion time and its variance. Thus, PERT is
a probabilistic technique: it allows us to find the probability of the entire project being
completed by any given date.
• CPM, on the other hand, is called a deterministic approach. It uses two time estimate, the
normal time and the crash time, for each activity

Importance of PERT/CPM
By using PERT and CPM analysis you will be able to answer questions such as:

1. When will the entire project be completed?

2. What are the critical activities or tasks in the project, that is, the ones that will delay the entire
project if they are late?
3. Which are the noncritical activities, that is, the ones that can run late without delaying the
whole project’s completion time?
4. What is the probability that the project will be completed by a specific date?
5. At any particular date, is the project on schedule, behind schedule, or a head of the
schedule?
6. On any given date, is the money spent equal to, less than, or greater than the budgeted
amount?
7. Are there enough resources available to finish the project on time?
8. If the project is to be finished in a shorter amount of time, what is the best way to accomplish
this at the least cost? (crash analysis)
CPM

• Finding the critical path is a major part of controlling a project.

• The activities on the critical path represent tasks that will delay the entire project if they are
delayed.
• Manager gain flexibility by identifying noncritical activities and re-planning, rescheduling, and
reallocating resources such as personnel and finances
PERT / CPM

• PERT
• Program Evaluation and Review Technique
• Developed by U.S. Navy for Polaris missile project
• Developed to handle uncertain activity times
• CPM
• Critical Path Method
• Developed by Du Pont & Remington Rand
• Developed for industrial projects for which activity times generally were known
• Today’s project management software packages have combined the best features of both
approaches.
• PERT and CPM have been used to plan, schedule, and control a wide variety of projects:
• R&D of new products and processes
• Construction of buildings and highways
• Maintenance of large and complex equipment
• Design and installation of new systems
• PERT/CPM is used to plan the scheduling of individual activities that make up a project.
• Projects may have as many as several thousand activities.
• A complicating factor in carrying out the activities is that some activities depend on the
completion of other activities before they can be started.

PROJECT NETWORK

• A project network can be constructed to model the precedence of the activities.

• The arcs of the network represent the activities.
• The nodes of the network represent the start and the end of the activities.
• A critical path for the network is a path consisting of activities with zero slack. And it is
always the longest path in the project network.

Drawing the project network (AOA)

• An activity carries the arrow symbol. This represent a task or subproject that uses time or
resources
• A node (an event), denoted by a circle, marks the start and completion of an activity, which
contain a number that helps to identify its location.

Determining the Critical Path

• Step 1: Make a forward pass through the network as follows: For each activity i beginning at
the Start node, compute:
 • Earliest Start Time (ES) = the maximum of the earliest finish times of all activities
immediately preceding activity i. (This is 0 for an activity with no predecessors.). This
is the earliest time an activity can begin without violation of immediate predecessor
requirements.
• Earliest Finish Time (EF) = (Earliest Start Time) + (Time to complete activity i. This
represent the earliest time at which an activity can end.
The project completion time is the maximum of the Earliest Finish Times at the Finish node.

• Step 2: Make a backwards pass through the network as follows: Move sequentially
backwards from the Finish node to the Start node. At a given node, j, consider all activities
ending at node j. For each of these activities, (i,j), compute:
• Latest Finish Time (LF) = the minimum of the latest start times beginning at node j.
(For node N, this is the project completion time.). This is the latest time an activity can
end without delaying the entire project.
• Latest Start Time (LS) = (Latest Finish Time) - (Time to complete activity (i,j)). This is
the latest time an activity can begin without delaying the entire project.

• Step 3: Calculate the slack time for each activity by:

Slack = (Latest Start) - (Earliest Start), or
= (Latest Finish) - (Earliest Finish).
A critical path is a path of activities, from the Start node to the Finish node, with 0 slack times.
PERT

PERT is designed for scheduling complex projects that involve many inter-related tasks. it improves
planning process because:
1. It forms planner to define the projects various components activities.
2. It provides a basis for normal time estimates & yet allows for some measure of optimism or
pessimism in estimating the completion dates.
3. It shows the effects of changes to overall plans they contemplated.
4. It provides built in means for ongoing evaluation of the plan.

ESTIMATING ACTIVITY TIMES

• Optimistic time (t0): is that time estimate of an activity when everything is assumed to go as
per plan. In other words, it is the estimate of minimum possible time which an activity takes in
completion under ideal conditions.
• Most likely time (tm): the time which the activity will take most frequently if repeated number
of times.
• Pessimistic time (tp): the unlikely but possible performance time if whatever could go wrong,
goes wrong in series. In other words, it is the longest time the can take.
• The times are combined statically to develop the expected time te .

te = to + 4tm + tp
6
Standard deviation of the time of the time required to complete the project
= tp - to
6
• Develop list of activities.
• A rough network for PERT is drawn.
• Events are numbered from left to right.
• Time estimates for each activity are obtained.
• Expected time for each activity is calculated : to+4tm+tp / 6
• Using these expected times calculate earliest & latest finish & start times of activities.
• Estimate the critical path.
• Using this estimate compute the probability of meeting a specified completion date by using
the standard normal equation
Z = Due date – expected date of completion
standard deviation of critical path

1. Draw the network &find expected project completion time.

2. What is the probability that it would be completed in 41 days?
So, standard deviation = 3.30
Probability for completing the job in 41 days.
Z = DUE DATE – EXPECTED DATE OF COMPLETION
S.D. OF CRITICAL PATH
= 41 – 36
3.30
= 1.51
The tabulated value of corresponding to calculated value i.e. 1.51 is .4345
So probability is .5 + .4345 = .9345 i.e. 93.45% that project will be completed on 41 day.

• Find the expected duration and variance of each activity.

• What is the expected project length?
• Calculate the variance &standard deviation of the project length.

Various paths &expected project length

A-C-F = 4+2+4 = 10
A-D-G = 4+7+2 = 13 CRITICAL PATH
B-E-G = 3+6+2 = 11
Thus critical path is A-D-G with an expected length of 13 days. Hence the expected project length is
13 days.
Project variance = 16/9 + 25/9 + 1 = 50/9